IRS Pulls Amnesty Protection on Some Secret Accounts

By

Laura Saunders

Mar 8, 2013 7:16 pm ET

In a move that has kicked up a storm of controversy, the Internal Revenue Service has apparently sent letters to clients of two Israeli banks who confessed to having secret offshore accounts. The letters rescind acceptance into the agency’s limited amnesty program for people with such accounts.

Edward Robbins, a lawyer at Hochman, Salkin, Rettig, Toscher & Perez in Beverly Hills, Calif., estimates that since last September the IRS has sent such “declination” letters to between 50 and 100 U.S. taxpayers with accounts at Bank Leumi and United Bank Mizrahi.

“Federal law prohibits the IRS from commenting on specific cases,” a spokesman for the IRS said in a statement. “However, it is important to note that this particular declination letter is only used in rare circumstances.

“There are a number of reasons why a taxpayer may be disqualified from participating in the IRS’s offshore voluntary disclosure program. For example, a taxpayer may be disqualified if he/she fails to make a timely, truthful and complete disclosure.”

Mark Matthews, a former chief of the IRS’s Criminal Investigations Division, says, “Another likely reason for the revocation of acceptance is an administrative error within the IRS, such as missing the fact that the agency already had the taxpayer’s name.”

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.